In a mooted deal that will test the independence of Fairfax’s newspapers, Fairfax is considering a merger with Macquarie Radio, controlled by John Singleton. Both companies tried to do a deal in 2011, but it fell apart when Macquarie couldn’t offer sufficient funding certainty to the bigger Fairfax Radio that would have seen the merger happen.
If the deal goes ahead, it will see the two companies merge their AM radio networks. This would provide a strong play to sell advertising nationally, including on the top rating stations in Sydney and Melbourne. But the merged entity would have to sell one Sydney station to make it happen — either Macquarie’s easy music station 2CH or Fairfax’s talk station 2UE. Both are marginal performers for their owners. Former powerhouse 2UE finished 11th out of 14 stations in the most recent radio ratings with a piddling 4% audience share. 2CH was barely any better with 4.8%.
The appeal for Macquarie is getting a stake in 3AW, which tops the Melbourne radio ratings with a 13.9% audience share. Besides 3AW, Fairfax’s talk stations are poor performers. As well as the disasterous 2UE, Fairfax’s 4BC in Brisbane has an audience share of 6.2%, putting it eighth out of 12 stations in the most recent survey. In Perth, 6PR finished seventh out of 11 stations with 7.4%. A bright spot is Perth music station 96fm which tops the ratings in that city with 12.9%. Fairfax’s other music stations, Magic in Melbourne and 4BH in Brisbane, are poor ratings performers.
Radio networks are allowed to own two stations in each market — hence Austereo (part of Southern Cross) owns The Today Network and the Triple M network. Fairfax owns two stations in Brisbane and Melbourne and Lachlan Murdoch’s DMG owns the Nova and SmoothFM stations in Sydney and Melbourne.
Fairfax papers such as The Sydney Morning Herald and The Australian Financial Review have been among the strongest critics of 2GB personalities such as Alan Jones, Ray Hadley and Chris Smith. Will that continue if Fairfax merges its radio interests with Macquarie Radio (where Jones has a shareholding)?
Media Watch last night laid out the dilemma for Fairfax in the way Ray Hadley has refused to genuinely apologise after the regulator, ACMA pinged him for getting a claim wrong about former federal treasurer Wayne Swan. You’d have to ask if it is really worth the reputational risk for Fairfax to merge with Macquarie Radio and try to control the antics of Jones, Hadley and Smith who are among the most complained about people in the Australian electronic media.
Fairfax reporters at the SMH have also been at the forefront in reporting problems Hadley has had with a former staffer who has taken him to court, and has also reported on asset sales by Hadley, such as a Gold Coast apartment, and his tax liabilities. Fairfax reporters have also been aggressive in reporting some of the choice atrocities of Jones, such as his “died of shame” comments about Julia Gillard and her father just over a year ago. It is suggested around the Sydney radio scene that Jones and Hadley would be reluctant to be under the control of Fairfax whom they both detest and distrust.
John Singleton and Macquarie board member, Mark Carnegie have a small investment in Fairfax, and are also reported to be “consultants” to Gina Rinehart, the biggest shareholder in Fairfax, and a major shareholder in the struggling Ten Network. She won’t be much interested in this radio play, if it happens, as she has a bigger issue to confront — the court case in Sydney starting today brought by two of her four children over a $5 billion trust fund.
Fairfax wants to control the merged company, meaning Singleton and Carnegie won’t be able to leverage their small, $80 million Macquarie radio group into being the dominant force in the new group, as they tried to do in 2011. That will have to be resolved for the deal to occur.
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